TUPE: Redundancy Guide for Employers

By Matthew Reymes Cole
19 Mar 2021

TUPE and During any transfer, there’ll be employees who don’t want to move, who aren’t a good fit, or could face redundancy for economic reasons.

But before you start handing out redundancies you need to consider who has protection from it.

We’re here to help you navigate the minefield that’s managing redundancy—before, during, and after a transfer.

What is TUPE redundancy?

This is any redundancy made in relation to the transfer. The main thing you need to be aware of when it comes to the TUPE process and redundancy is this:

If the main or principal reason for an employee’s dismissal is the transfer then it’s automatically an unfair dismissal. This means that a fair redundancy procedure still needs to be followed

Issues can occur at any stage during the process. They aren’t limited to the transfer itself and need to be carried out by the transferrer. The key elements to any transfer are the following:

  1. Identifying which employees it affects.
  2. Informing and consulting affected employees.
  3. Informing transferee of employee liability information.
  4. Inform and consult on any planned measures towards the employees after the transfer.
  5. Once the transfer happens, liability for redundancies and redundancy payments will lie with you.

Redundancy before TUPE transfer

Similarly, if an unfair dismissal occurs before the transfer, you become liable for it.

You might not want to take on all of the employees from the business you are merging with. In which case, redundancies are inevitable. However, you must give a legitimate economic, technical, or organisational (ETO) reason for this.

Failure to give a legitimate reason is likely to result in a tribunal claim.

Redundancy after TUPE transfer

There are obligations for new employers after the transfer process. Making a TUPE transfer redundancy after transfer is usually less problematic, but can still result in tribunal claims.

Once the transfer has occurred, you can make an employee redundant if you have an ETO reason for doing so. But remember—TUPE protection extends indefinitely.

So you must ensure you provide clear reasoning for your decisions and keep all employees informed.

But who pays for redundancy after TUPE? This is a common query when redundancies have been agreed beforehand. The short answer? The transferee.

When taking on new employees, you accept liability for them. That includes all of their contractual terms and statutory rights. That includes redundancy payments.

When should I make employee redundant?

Each transfer is different. There are a huge number of potential TUPE and redundancy scenarios to consider, such as transferring part of your organisation overseas.

In this scenario, you might consider leaving the redundancy to the transferee.

However, staff who are impacted by the transfer could feasibly bring a claim against yourself and the transferee.

Deciding when to make an employee redundant is difficult. So if you’re facing a complex TUPE and redundancy scenario, speak to one of our experts today for support and guidance.

Enhanced redundancy after TUPE transfer

Using these packages as an incentive to make voluntary redundancy more attractive can work. But it also comes with risks. Particularly to the transferee.

If the transferor offers an enhanced redundancy package to their employees in their contract. Guess what? You have to offer the same package when the transfer occurs.

Entering into a discussion about redundancies prior to the transfer is vital to avoiding potentially bank-breaking payments later on.

Remember: you might be able to justify a change of terms given a legitimate economic reason.

Expert support

TUPE is notoriously complex. It can be fraught with tension and disagreements. To ensure your transfer goes smoothly, speak to a Croner expert today on 01455 858 132.

About the Author

Matthew Reymes-Cole

Matt joined Croner in 2007 as an employment law consultant and has advised clients of all sizes on all aspects of employment law. He has worked within management positions since 2017 and currently overseas a team within the litigation department, whilst continuing to support a number of clients directly.

Get expert views & insights delivered directly to your inbox